If a Lender Uses a Collar,the Transactions Would Be

question 28

Multiple Choice

If a lender uses a collar,the transactions would be

• A)buy a floor at one exercise price,sell a floor at another exercise price
• B)buy a floor,sell a cap
• C)sell a floor,buy a cap
• D)buy a cap at one exercise price,sell a floor at another exercise price
• E)buy a cap and sell a floor at the same exercise price

---

Definitions:

Hysteresis

The phenomenon in which the value of a physical property lags behind changes in the effect causing it, often observed in magnetic materials where the magnetic flux density trails the magnetic field strength.

Inductive

Pertaining to inductance or exhibiting properties of inductance, which is the property of an electric conductor or circuit that causes a change in current flow.

Rotor Stalled

A condition in which the rotor of an electric motor or generator fails to rotate due to excessive load or insufficient power.

Servo Motor

A rotary actuator or linear actuator that allows for precise control of angular or linear position, velocity, and acceleration.